Electi2014 on RECAP Election Review + What’s Next for Ohio The anticipation for Election Day finally peaked and now the aftermath of the poll results is starting to sink in across the state. While it may be clear who the winners are, there is still much more to uncover as Ohio prepares for what is to come in the next four years. This Election Review provides insights into what the results really mean for Ohio, what issues are left and what could be on the ballot in 2016. Election Review + What’s Next for Ohio We’re Going to Campaign like it’s 2018! by Steve Tugend Last night, when all of the Republican statewide officeholders were declared victors in their reelection bids, the 2018 gubernatorial race quietly began. Thanks to Article III Section 2 of the Ohio Constitution, not only is Governor John Kasich unable to run for a third term, but his statewide colleagues, Mike DeWine, John Husted, Dave Yost, Mary Taylor and Josh Mandel, will be unable to seek an additional term in their current positions in the 2018 election. While Yost, a former county prosecutor, is expected to seek the attorney general’s position in that year, there could be a crowded GOP field vying for governor in the 2018 election. Husted, DeWine, Mandel and Taylor could all enter the race. However, one of these four may opt to run against Senator Sherrod Brown that year. Matt Borges, the Chair of the Ohio Republican Party, is likely to lose sleep worrying about avoiding a repeat of the 2006 gubernatorial race debacle where Jim Petro and Ken Blackwell collided in a vicious primary battle that resulted in Democrat Ted Strickland clobbering the Republican nominee and the GOP statewide ticket winning only a solitary seat thanks to Mary Taylor. Chairman Borges will no doubt work to persuade one of the statewide officeholders to oppose Senator Brown. For the Democrats, the picture far less clear. John Carney appears to have been a relatively strong performer on the ill-fated Democratic ticket and this year’s effort was presumably not his last attempt at statewide office. Connie Pillich all but swept editorial board endorsements in her race, and Richard Cordray, due to his choice to stay out of Ohio statewide politics this year, may be well-positioned to return to Ohio. The next Democratic Party Chair will have a steep, uphill climb competing against four more years of name recognition and statewide experience and fundraising. What this means to organizations and companies with long-term policy objectives? The plentiful field of potential 2018 candidates for governor and the resulting uncertainty of who will be each party’s eventual standard- bearer means that organizations will have to work particularly hard to establish some kind of relationship with all potential candidates – briefing them on key long-term issues. Federal Spotlight The race to challenge U.S. Senator Rob Portman in 2016 has also begun. While it is unclear whether Portman will have any strong primary opposition, the race to be his Democratic opponent would appear to be wide open. State Representative Bob Hagan has declared his interest in being the Democratic nominee, but others are expected to enter the race. Congresswoman Joyce Beatty is rumored to be interested in running in a year that will, no doubt, have better turnout for Democrats than what we saw yesterday. Key Questions about John Kasich’s Second Term Will a White House bid be explored? 1 Despite Kasich’s denial on the gubernatorial campaign trail of being interested in running for president, there is no denying that many of his advisors would like him to run and that he was interested in being the POTUS when he briefly campaigned for the job in 2000. If Kasich begins the exploration process, an unprecedented amount of national attention will zoom in on his second-term policy priorities. If he listens to his advisors, his stance on every issue will need to be filtered through the perspective of Republicans who vote in presidential primaries. Issues such as the continuation of Medicaid expansion become laden with political landmines and will have to be handled with an incredibly high level of sophistication. COLUMBUS CLEVELAND MARION Election Review + What’s Next for Ohio What will be Kasich’s “legacy” initiatives? 2 As evidenced by his passionate support for his only Ohio Supreme Court appointee, Justice Judi French, during this year’s election, Kasich values and will spend political capital on his legacy. What’s next? Will he be able to broker a deal with conservatives in the Ohio House that will further reduce the state’s personal income tax in exchange for beefing up Ohio’s severance tax that currently is at a rate remarkably lower than bordering jurisdictions such as Pennsylvania and West Virginia? Will he try to favorably position his steadfast Lieutenant Governor, Mary Taylor, to be the Republican nominee for a statewide position of her choosing? Will he take a stronger stand on “moral leadership issues?” 3 One of the themes that Kasich explored during his re-election stump speeches was the need for state government to reinforce the state’s moral fabric. While for Republicans, the term, “moral”, has typically translated into the term, “socially conservative”, Kasich appears to be assigning the term a different meaning. He has garnered support from legislative leaders to tackle issues related to drug addiction and mental illness. And although specifics on this policy area are unclear, there has been some talk about trans-generational initiatives to partner Ohio’s college students with the state’s senior citizens. Organizations advocating for philanthropic public policy objectives may find a receptive audience in the Governor’s office. What this means for corporations and organizations? 4 Corporations should be on the lookout for populist ideas. Some believe that the wrongdoings by the management of his former- but-now-defunct employer, Lehman Brothers, had an impact on Kasich. A second-term effort to target corporate greed or deceit would not be a surprise. Taxes, Education + Unemployment May Top “Lame Duck” Session by Tony Fiore The last political ads of the season have thankfully run. Ballots were cast on November 4. And the 131st Ohio General Assembly is set to begin in January 2015 with many familiar faces returning and several new ones entering the freshman class. In addition, Ohio voters overwhelmingly picked Governor John Kasich and other statewide leaders to continue running our state government for another four years. But, before the 2015 swearing in ceremonies begin there is a significant amount of work the current House and Senate may finish before the final gavel places this legislative session in the history books forever. Tax One of the most significant state law proposals pending before the Ohio General Assembly is municipal tax reform. Ohio is one of only 10 states that tax both individuals and businesses. In addition, Ohio is the only state where each city/village makes its own rules and regulations related to municipal tax assessment and collection. On one hand, such flexibility has provided municipalities the ability to collect tax on transient workers that may not live in its boundaries. In addition, some argue that local control permits a softening of tax liability in bad years by utilizing a net operating loss carry forward mechanism. Others argue such flexibility in over 600 different sets of local tax ordinances adds to the complexity and cost of compliance for individuals and companies trying to expand or grow their business. To resolve this friction among businesses and municipalities the Ohio House introduced HB 5 in January 2013. HB 5 seeks to provide more uniformity for administration and filing of municipal income taxes. The bill passed out of the House by a narrow margin in November 2013 by a vote of 56-39 and is currently pending in the Senate. More than 33 statewide and regional business associations have been advocating for the passage of HB 5 under the Municipal Tax Reform Coalition. While fierce opposition has come from representatives of municipalities such as the Ohio Municipal League, other regional groups such as the Mid-Ohio Regional Planning Commission have been advocating for a finite number of reasonable reforms that reduce the negative impact on municipalities COLUMBUS CLEVELAND MARION Election Review + What’s Next for Ohio while advancing the goal of municipal tax uniformity. The question is not “if” HB 5 passes in the post-election session, it is what will be in the bill once it does pass. Another tax issue that could resurface during lame duck session is Governor Kasich’s plan to increase the severance tax on fracking in Ohio. The severance tax is a tax imposed on the value of non-renewable natural resources that will be used outside the state from which they are extracted. The Governor has stated his intention to push harder post-election for his proposed 2.75 percent tax. In May, the Ohio House passed HB 375 by a vote of 55-38 that contains a 2.5 percent severance tax, but Governor Kasich is pushing for more. He has stated his intention is to use the revenue from the severance tax for local governments as well as additional tax reductions throughout the state. Whether in the lame duck session or early next year the severance tax issue will certainly be addressed in one way or another. Education Amidst a slew of criticism over Ohio’s New Learning Standards over the summer the Ohio House introduced and began hearings on HB 597. The bill would repeal Ohio’s standards and replace them with three different sets of standards that would be assessed over the next four academic years.